Buildings insurance between exchange and completion

14 July 2015

If you are purchasing a property, you will need to arrange buildings insurance from exchange of contracts, so you have insurance between exchange and completion as this is your responsibility according to the conveyancing wording recommended by the Law Society.

Unfortunately, not all insurers will provide this cover. Because you do not yet live in the property, it will either be occupied by other people or even unoccupied during the period between exchange and completion, so household insurance policies are not suitable for covering the property.

Many insurance policies will grant cover between exchange and completion to a purchaser of a property already insured by the vendor. However, no purchaser can rely on that insurance policy, as there is no guarantee that the purchaser:
a) has insured the property for an adequate amount
b) has not made errors on his proposal or application making his insurance policy void
c) has paid his premiums up to date
d) has not failed to comply with any terms in his policy which could invalidate cover, or to notify his insurer of any changes which could also cause the policy to be void.

It is therefore important that as the purchaser of a property, you arrange buildings insurance from the moment you exchange contracts. You may need a specialist insurer to do this, as many of the large household insurers decline to offer a quote until you have moved in.